Approaches to Value Flashcards Preview

SCC REA 201 > Approaches to Value > Flashcards

Flashcards in Approaches to Value Deck (9)
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1
Q

Capitalization Rate

A

The percentage rate or rate of interest considered a reasonable return on the investment

2
Q

Comparative Market Analysis (CMA)

A

A comparison of prices of recently sold homes that are similar to a seller’s home

3
Q

Cost Approach

A

Also called “appraisal by summation”, it estimates today’s cost of all improvements, minus all factors of depreciation, plus the valuation of the land using the market data approach

4
Q

Effective Gross Income

A

Total income after deductions for vacancies and bad debts. Also referred to as ‘Adjusted Gross Income’

5
Q

Income Approach

A

An appraisal technique used on income-producing properties; assumes that income from property establishes value

6
Q

Market Data Approach

A

Similar to the approach used by licensees or investors when listing residences

7
Q

Net Income

A

The gross income less costs and expense for a 1-year period

8
Q

Replacement Cost

A

Estimates cost based on using today’s materials and technologies

9
Q

Reproduction Cost

A

Estimates the cost by using the original materials and technologies

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